Reported capacity for these firms increased from *** metric tons in 2003 to *** metric tons in 2005 with continued expansion to *** metric tons in 2006 and to *** metric tons in 2007.5 Respondents provided ***. According to that data source, ***.6
Table VII-3 provides data on the operations of the reporting firms. Capacity to produce subject merchandise in China rose continuously during 2003-05 period and in interim 2006 compared to interim 2005. Capacity is projected to increase further in 2006 to a level almost *** than that reported in 2003.7 Reporting firms did not, however, project a *** rise in 2007 over that reported for 2006.8 CFS production kept pace with the expansion of capacity, with capacity utilization ratios remaining above *** percent throughout the period examined (including projected 2006 and 2007).9 There is a *** home market for CFS paper in China; the home market was, in fact, the *** destination of CFS paper from Chinese mills throughout the period examined. Exports, however, rose continuously from about *** of total shipments in 2003 and 2004 to well over *** of total shipments in both January-September 2006 and full-year (projected) 2006 but are projected to decline as a share of total shipments in 2007. Exports of CFS paper to the United States as a share of total shipments almost *** from *** percent in 2003 to *** percent in January-September 2006 and are projected to fall back in 2007 to a share *** to that reported for 2003. In absolute terms, the quantity of exports to the United States in 2007 are projected to decline by about *** tons–an amount *** than the total volume exported in 2003. Chinese respondents argued that the volume of exports to the United States was temporarily stimulated by the phase-out period for a VAT rebate. 10
Table VII-3 Coated free sheet paper: Chinese production capacity, production, shipments, and inventories,
2003-05, January-September 2005-06, and projected 2006-07
As noted in table IV-1, a substantial portion of the CFS paper imported from China is marketed by U.S. importers related to the Chinese manufacturers. Specifically, *** sells CFS paper through ***11
Petition, exh. 15. Chinese respondents and Unisource’s postconference brief, exh. 20. ***. Ibid.
7 Counsel for the Chinese manufacturers and Unisource states that “coating capacity sets a firm and immovable upward limit on a CFS producer’s capacity to manufacture additional CFS.” Further, the firms responding to the Commission’s foreign producer questionnaire based their capacity data on the “upward limits of that capacity.” Chinese manufacturers and Unisource’s postconference brief, p. 38.
8 Global Paper Solutions argued in a declaration attached as exh. 18 to the Chinese respondents and Unisource's postconference brief that to his knowledge ***. This means that ***. As shown in table VII-3, the projected capacity figure for 2006 is over *** tons greater than that reported as installed in 2005. ***.
9 Chinese respondents state that there is “no dispute that China is the fastest growing market for CFS in the world” and tie the growing demand to the rapidly expanding Chinese GDP and, more specifically, to the 2008 Summer Olympics and the 2010 World Fair to be held in China. Chinese manufacturers and Unisource’s postconference brief, pp. 33-34.
10 They state: “Effective November 2006, exports of CFS paper are no longer eligible to receive a VAT rebate. Removal of the VAT rebate will increase the cost of Chinese CFS exports by approximately 13%. The slight relative increase in the ratio of Chinese exports to the U.S. in the interim comparison is largely, if not entirely, attributable to the fact that revocation of the VAT rebate had a transition period.” Chinese respondents and Unisource's postconference brief, pp. 31-33.
***’s importer questionnaire response, question I-4.